ESCP Europe

Item type

Study and report

Dissertation

• EMIB Executive Master in International Business

Language

English

Publication year

2025

Subjects

AIRLINE

This thesis compares the business recovery performance from the COVID-19 pandemic of the 9 largest publicly traded United States-based Ultra-Low-Cost Carrier, Low-Cost Carrier, and Full-Service Network Carrier airlines. The COVID-19 pandemic had unprecedented impacts on the aviation industry and the airline industry segment in particular, surpassing the impacts of other biosecurity events in recent history, even at the beginning of the shock event. The main The objective of this thesis was to determine whether there was an observable pattern in the business recovery performance of the airlines that could be linked back to the business model of the airlines. The foundation of this thesis was a comprehensive financial analysis of the business recovery performance of the studied airlines. The analysis also included the airlines’ financial and operational performances. The inputs for the analysis were the financial records and air traffic service records of the airlines from 2019 to 2023. The financial records used in the analysis were the 10-K annual filings of the airlines submitted to the United States Securities and Exchange Commission. The air traffic service records used in the analysis were the entries in the United States Department of Transportation – Bureau of Transportation Statistics T-100 database. The analysis included the calculation of the business recovery performance metric, common financial metrics such as the Horizontal Analysis values and Operating Leverage, and common airline performance metrics such as the Revenue Passenger Mile and Passenger Yield values. The final step of the analysis was the investigation of the correlation between the various financial and operational metrics and the business recovery performance. The analysis results of this thesis showed that there in fact, was significant correlation between the business recovery performance and the business model of the airlines. Full-Service Network Carrier airlines had the strongest business recovery performance, followed by Low-Cost Carrier airlines, and finally, Ultra-Low-Cost Carrier airlines had the weakest business recovery performance from the COVID-19 pandemic. The analysis of the correlation between specific financial and operational metrics and the business recovery performance of the airlines also found a significant correlation for some of the studied metrics, such as the 2019 Current Ratio. However, none of the studied metrics showed as significant of a correlation as was found for the airline business model. The investigation of causality was outside of the scope of this analysis, but the thesis does provide some recommendations for further analysis, including how specific airline management practices could have affected the business recovery performance. The impacts of the COVID-19 pandemic on the aviation industry, and particularly the airline industry, were studied intensively during the pandemic years, resulting in a number of papers and journal articles being published on the subject. A significant portion of the previous work also focused on the US airline industry, with some articles even investigating the specific impacts of the airline business model on the business performance during the COVID-19 pandemic period. The main contribution of this thesis was the definition of a novel and comprehensive business recovery performance metric and the analysis of the business recovery performance over a longer period of time, highlighting the long-term impacts of the external shock events on the studied airlines. The underlying analysis of this thesis was based on a large dataset of Full-Service Network Carriers, Low-Cost Carriers, and Ultra-Low-Cost Carriers from 2019 and 2023 and included a large number of analysis points. Most of the previous work on this subject either focused on a shorter analysis period or a narrower analysis scope of only a few metrics.